Bitcoin is a “Millennial Story”: Fundstrat Strategist Tom Lee

Bitcoin has a promising future because millennials are poised to do for the cryptocurrency what baby boomers did for the stock market back in the 1980s and 90s, says Fundstrat’s Tom Lee.

Speaking to CNBC about Bitcoin’s future, Lee claimed things are looking up because young investors appear set to take it forward, as is evinced by their “great interest in digital businesses, social media and Bitcoin”.

“… this [Bitcoin] is a millennial story. The average millennial is 25 today. The boomers were 25 in 1982, so what did the boomers drive from 1982 to the peak population of the boomers, which was '99? The S&P 500.”

“…the millennial population is not going to peak until 2040,” Lee added.

Lee’s comments echo the results of an online survey of more than 2,000 US-based adults, conducted in October this year by venture capital firm Blockchain Capital. The survey found that 30% millennials preferred $1,000 of Bitcoin over $1,000 of government bonds. In addition, 42% millennials were familiar with Bitcoin (as compared to just 15% of the 65+ age group), and 42% agreed that Bitcoin usage would become widespread in the next 10 years, while 32% said they were likely to buy Bitcoin in the next 5 years.

The crypto market is growing at a blinding rate, with Bitcoin futures products being launched by major exchanges such as CBOE and CME, while the users for crypto exchange Coinbase exceed those of Charles Schwab. 

Lee foretold earlier this year that Bitcoin would hit $11,500 by mid-2018, but the cryptocurrency has already grown more than 1700% since the start of 2017, currently trading at above $17,000. In comparison, the S&P has seen a record-breaking increase of 18% this year.

However, despite all this, digital currencies are still just a drop in the ocean of the world’s financial markets. The market cap of Bitcoin is currently over $292 billion, while the crypto market stands at close to $500 billion. Meanwhile, the collective stock markets of the world are valued at over $66 trillion, while the market cap of gold, with which Bitcoin is often compared, is $8.2 trillion.

Digital currencies might not pose any significant threat to traditional markets at present; however, given the massive increases the market has seen in a short span of time, it remains to be seen where things stand by 2040.